Yes, swag is a Scrabble word!
...and is worth 8 points in Scrabble, and 9 points in Words with Friends
swag
Verb
1. Droop, sink, or settle from or as if from pressure or loss of tautness
2. Walk as if unable to control one's movements
3. Sway heavily or unsteadily
Noun
1. Valuable goods
2. Goods or money obtained illegally
3. A bundle containing the personal belongings of a swagman
What Scrabble words can I make with the letters in swag?
4 Letter Words
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3 Letter Words
2 Letter Words